The Housing Committee of the house of commons today published its inquiry into the government’s white paper ‘A fairer Private Rented Sector’ which in June last year laid out the government's intentions for the upcoming Renters Reform Bill.
You can read ACORN’s initial response to the White Paper here, and our submission to this Inquiry here.
Although we are pleased that the committee has made some sensible recommendations on the future regulation of private renting, and hope these are taken on board in the drafting of the bill, we are surprised by some of their conclusions, and are disappointed that in the midst of the worst cost of living and housing crisis for a generation, the housing committee have not been bolder in suggesting the real solutions we need to ensure the Private Rented Sector is fit and fair for tenants.
We are pleased to see support for the introduction of the Decent Homes Standard to the Private Rented Sector and support for a renting Property Portal to include safety certificates and information. The work on incorporating energy efficiency standards is also positive as is the suggestion that there should be a single Ombudsman for the entire Private rented Sector. The committee acknowledges the importance of making sure local authorities have enough funding to carry out enforcement properly and the need for more rigorous regulation of holiday lets. Their recommendation to remove the need for the Secretary of State to approve local licensing schemes is also very sensible and will support proactive local enforcement and regulation by local governments.
We particularly support the committee's suggestions on the White Paper in the following areas:
1. On introducing new ‘no fault grounds’ to replace Section 21 evictions, so that landlords are able to evict tenants to sell their properties or move themselves or families in. We were concerned that the policies set out in the White Paper could be too easily exploited by landlords looking to issue Section 21s by the back door. The committee recommends:
- Increasing the minimum amount of time a tenant has to have been in a property before a landlord can issue this type of eviction from 6 months to 1 year. This means tenants should have security for at least a year.
- Increasing the amount of time after an eviction that landlords are barred from reletting a property from 3 months to 6 months. This will further deter landlords from using these grounds erroneously.
- That landlords should have to put their properties on the market for 6 months advertised with sitting tenants before being able to use these grounds.
2. On notice periods to leave. We think that 2 months notice is not enough time to find a suitable new home, particularly if a tenant has children in school or specific access needs. The committee recommends:
- Increasing the notice periods for ‘no fault’ (the selling or moving in) grounds from 2 months to 4 months. This will give tenants more time to find a suitable new home, within school catchment areas, and allow them to shop around.
What’s not so good?
As the report acknowledges, the key issue for most private renters is affordability, and beyond suggesting landlord tax reviews and building social housing (which we fully endorse) and unfreezing housing benefit (which again we believe is of critical importance), the committee does not look at other options such as rent controls.
We are particularly concerned about the following suggestions:
1. Open ended tenancies. One of the key arguments for open ended tenancies is to stop tenants from being trapped in unsatisfactory housing because they signed a contract for a fixed term. This should bolster standards through increasing competition. Open-ended tenancies will also help victims of domestic abuse who we have seen unable to leave dangerous situations as landlords won’t release them from contracts and they are liable for rent for a fixed term. They will also support the job market, by allowing tenants the flexibility to move around for work if they need to all the while giving others the peace of mind that they can put down roots and not worry about having to move after a year.
- The committee’s suggestion that tenants should not be able to leave until 6 months into a tenancy in order to guarantee landlords 6 months income totally undermines some of the best aspects of these types of tenancy agreements.
2. The need to reform the court system before banning Section 21 evictions. We acknowledge that the court system can be slow for landlords and tenants alike to use and needs to be made more efficient and are not against the suggestion of creating a specialist housing court. Indeed we know the courts will need to adapt to make this legislation work as efficiently as possible long term. However, tenants have been waiting for and have needed this reform for years. In a weighing up of the importance of millions of tenants gaining freedom from the stress and insecurity of Section 21 evictions, versus a minority of landlords who face rent arrears having a longer process to regain their properties, we feel the interests of all private tenants should take precedence.
- The committee’s suggestion that reforms should only come after court process reorganisation is placing the interests of a small number of landlords above the rights that all tenants deserve. We feel that these rights need to be implemented and that changes to the court process should be worked out along the way.
3. Rent rises: The committee does not support outlawing arbitrary annual rent rise clauses. It says that getting rid of these would remove predictable increases and instead agreements should have to stipulate how much the rent will increase as part of the clause. We are at a loss to understand why it should be assumed that rent will increase year on year.
Overall, we are pleased that the housing committee has listened to tenants groups and in particular have put forward some important recommendations around closing the loopholes on evictions which could have undermined the aim of the bill to increase security and standards in the sector. We will continue to campaign for safe, secure and affordable housing for all, and will be lobbying representatives to make the bill as transformative and positive for private sector tenants as possible, including fighting for truly open ended tenancies, stopping unfair rent hikes and bringing forward the bill as a matter of urgency.